POVERTY, MDG AND MICROCREDIT SYSTERM

Poverty ?

Poverty depends on multi-dimensional aspects It varies time to time, culture to culture, and space to space Thus, it is difficulty to define poverty universally. However, It can be viewed as the condition characterized by the Severe Deprivation of Basic Human Needs such as: (i) Food (ii) Shelter (iii) Clothing (iv) Education (v) Health-care

Types of Poverty

Broadly classified as:

Absolute Poverty : Income between above 1US$

and 2 US$ / Day/ Person

Hard-core Poverty : Income 1 US$ or less than

1US$ / Day/ Person

Causes o f Poverty
Lack of productive resources such as agricultural land, financial capital etc Lack of food production and mal-distribution of food Lack of employment opportunity Illiteracy Lack of healthcare facility Lack of modern technology of crop cultivation Lack of access to the financial facilities for pursuing income generating activities

Causes o f Poverty (cont)

Political and social unrest such as war, revolution, terrorism etc

High rate of inflation

Corruption, lawlessness system of the country Environmental hazard Lack of infrastructural facilities and nepotism in the socio-political

Gender disparity

Consequences o f Poverty

Low rate of GDP growth

Obstacles for innovation and modern technique of production system

Increases unskilled labor force Increases the probability of political instability Reduces life expectancy

Consequences o f Poverty (cont)

Increases the chance of gender disparity Increases the chance of corruption, nepotism, exploitation and racialism Creates obstacle for increasing social, political and environmental awareness Increases the probability of social insecurity and vandalism Leads to lower level of living-standard.

Indicators of Poverty
Percentage of population earning less than 1USD/Day

Per capita GDP

Life expectancy Literacy rate of the population of a country Mother and infant mortality rate Access to Health care facility ( such as number of doctors, nurse, hospitals per person )

Indicators of Poverty (cont)

Prevalence of malnutrition (%)

Access to infrastructural facilities of a country (such as roads, number of vehicles) Access to safe drinking water and sanitation (%) Percentage of consumption of energy (such as electricity and gas) Per capita consumption of cereal food

Steps of Reducing Poverty

Step 1. Acceleration of pro-poor growth A stable macroeconomic framework Development of private sector Sound and effective financial system

Strengthening institutional financial capability

Rural development Expansion of productive sector

Steps of Reducing Poverty (cont)

Step 2. Promotion of good governance Judicial reforms to infuse dynamism in judicial process, Reforms in police administration

Ensure transparency and accountability in the use of public resources.

Steps of Reducing Poverty (cont)

Steps 3. Investment in human development Strengthening the health-care program Enhance educational activities Ensure food-security and nutritional programs

Allocation more resources to these sectors reducing military expenses

Steps of Reducing Poverty (cont)

Step 4.Women Empowerment Policies and institutional actions to close the gender gap Reduce violence against women Remove hindrances to womens employment Reduce high maternal mortality Implement policies to ensure formal equality

Create women friendly institutional environment

Steps of Reducing Poverty (cont)

Step 5. Ensuring social security:

Safety net for the poor such as food for work and old age pension schemes in rural areas.
Give emphasis on the social solidarity

Risk insurance covering following aspects:

(i) providing access to credit to the poor during natural disaster (ii) strengthening disaster preventing and mitigating mechanisms (iii) measures to minimize suffering from violence and personal insecurity.

Organizations Working for Poverty Alleviation

Grameen Bank ( Specialized Bank) PKSF (Government Organization) BRDB (Government Organization) BARD (Government Organization) ASA (Local NGO) Proshika (NGO)

BRAC (Local NGO)

Organizations Working for Poverty Alleviation

Donor agencies such as :

IFAD CIDA FAO UNDP JICA CIDA

GOALS OF MDGs

 Why the MDGs ?

The 1990s: a decade of faltering progress
progress continued but too slowly to reach agreed targets and progress slowing down .. need more care on Under-5 mortality rate
Maternal mortality rate Child malnutrition Water and sanitation Income poverty

Primary education

MDGs are meant to accelerate progress

In Sep 2000, representatives of 189 countries met in New York at the U.N. Millennium Summit. The agreed binding outcome of the Summit was the Millennium Declaration. Rich countries are held accountable for providing greater support, i.e. providing more debt relief and allowing greater access to their markets So developing countries are motivated to adopt MDG development strategies A U.N. working group later supplemented the Declaration by devising a set of 8 Goals, which were eventually formulated as 21 Targets, which were measured by 60 Indicators.

The millennium goals: an overview

1. 2. 3. 4. 5. 6. 7. 8.

Eradicate extreme poverty and hunger

million are hungry)

(1.2 billion have less than $1 a day, 800

Achieve universal primary education

(113 million children are not in school)

Promote gender equality and empower women

(60% of children not in school are girls, women have on average only 14% of seats in parliaments)

Reduce child mortality (every day 30,000 children die of preventable causes.) Improve maternal health (In Africa, a woman has 1 chance in 13 of dying in
childbirth)

Combat HIV/AIDS, malaria and other diseases

HIV/AIDS, 75% of them in Africa)

(40 million are living with

Ensure environmental sustainability

clean water, over 2 billion to sanitation)

(1.1 billion people do not have access to

Develop a global partnership for development (ODA declined from 53 to 51

billion from 1990 to 2001)

MDG: Targets
Goal 1: Eradicate Extreme Poverty and Hunger
Targets 1 Halve, between 1990 and 2015, the proportion of people whose income is less than one dollar a day Targets 2 Achieve full and productive employment and decent work for all, including women and young people Targets 3 Halve, between 1990 and 2015, the proportion of people who suffer from hunger

Goal 2: Achieve Universal Primary Education

Targets 4 Ensure that, by 2015, children everywhere, boys and girls alike, will be able to complete a full course of primary schooling

Goal 3: Promote Gender Equality and Empower Women

Goal 2: Achieve Universal Primary Education

Targets 4

Ensure that, by 2015, children everywhere, boys and girls alike, will be able to complete a full course of primary schooling

Eliminate gender disparity in primary and secondary education, Targets 5 preferably by 2005, and in all levels of education no later than 2015

Goal 4: Reduce Child Mortality

Target 6 Reduce by two-thirds, between 1990 and 2015, the under-five mortality rate

Target 7 Target 8

Goal 5: Improve Maternal Health

Reduce by three quarters, between 1990 and 2015, the maternal mortality ratio Achieve, by 2015, universal access to reproductive health

TARGET 9
TARGET 10

GOAL 6: COMBAT HIV / AIDS, MALARIA AND OTHER DISEASES

HAVE HALTED BY 2015 AND BEGUN TO REVERSE THE SPREAD OF HIV/AIDS ACHIEVE, BY 2010, UNIVERSAL ACCESS TO TREATMENT FOR HIV/AIDS FOR ALL THOSE WHO NEED IT

Targets 11

Achieve, by 2015, universal access to reproductive health

Goal 7: Ensure Environmental Sustainability

Targets 12 Targets 13
Targets 14 Targets 15

Integrate the principles of sustainable development into country policies & programs and reverse loss of environmental resources Reduce biodiversity loss, achieving, by 2010, a significant reduction in the rate of loss

Halve, by 2015, the proportion of people without sustainable access to safe drinking water and basic sanitation By 2020, to have achieved a significant improvement in the lives of at least 100 million slum dwellers

Goal 8: Develop a global partnership for development

Target16 Targets 17 Targets 18 Targets 19 Develop further an open, rule-based, predictable, non-discriminatory trading and financial system Address the special needs of the least developed countries Address the special needs of landlocked developing countries and small island developing States Deal comprehensively with the debt problems of developing countries through national and international measures in order to make debt sustainable in the long term

Identifying MDG Progress (Numerical)

Rates of progress actual rate
required rate Actual annual rate of progress - deprivation indicators (poverty, hunger, IMR)

Xti - Xt0 Xt0 t1-t0

t0 1990 or closest year t1 most recent year Xt0 value of indicator in t0 year Xt1 value of indicator in t1 year

Required Rate of Progress (RP):

-1/2 -2/3 -3/4 -1 -1 -1/2

Indicator
Poverty incidence Under-5 mortality Maternal mortality ratio Net enrolment ratio (no non-enrolled) Gender ratios (no girls deprived) Percentage of access to safe drinking water to non-access group

RP

Target Year - Baseline Year

Progress: Actual vs Required Rate

Assessment
Slow or reversing

Condition
Actual rate of progress is less than half required rate of progress

Moderate

Actual rate of progress is more than half but less than the required rate of progress
Actual rate of progress is equal to or greater than required rate of progress

Fast

Eradicate Extreme Poverty

Target: Reduce extreme poverty by half
World Year Baseline year value 1991 Value 33 Bangladesh Year 1991 Value 58.8

Goal year value

Current year value Actual rate of progress Required rate of progress (=-1/2) Assessed rate of progress

2015
2005

16.5
22 -0.023 - 0.021 Fast

2015
2005

29.4
40 -0.022 -0.021 Fast

Progress but created disparity in Bangladesh,

However, the situation was not good in 2008. Gini coefficient in income increased from 0.259 in 1991 to 0.306 in 2000, Inequality increased in Bangladesh.

Reduce Child Mortality

Target: Reduce under-5 mortality by two-thirds
World Year Baseline year value Goal year value Current year value Actual rate of progress Required rate of progress (=-2/3) Assessed rate of progress 1990 2015 2007 Value 93 31 67 -0.016 - 0.027 Moderate Bangladesh Year 1991 2015 2006 Value 151 50 62 -0.039 -0.027 Fast

Higher progress in Bangladesh

Under five mortality greatly reduced in Bangladesh because of rising awareness and expanding vaccination programs in both rural and urban areas.

Improve Maternal Health

Target: Reduce maternal mortality by three-fourth
World
Year Baseline year value Goal year value 1990 2015 Value 430 108

Bangladesh
Year 1991 2015 Value 574 144

Current year value

Actual rate of progress Required rate of progress (=-3/4) Assessed rate of progress

2005

400
-0.005 - 0.03

2006

290
-0.033 -0.03 Fast

Slow

Higher progress in Bangladesh, Maternal mortality greatly reduced in Bangladesh because of expanding maternal health care programs both by government

Achieve Universal Primary Education

Target: 100% enrollment and completion of primary education
World Year Baseline year value (non-enrolled %) Goal year value (non-enrolled %) Current year value (non-enrolled %) Actual rate of progress 1991 2015 2007 Value 18 0 11 -0.024 Bangladesh Year 1991 2015 2006 Value 40 0 13 -0.045

Required rate of progress (= -1)

among non-enrolled boys and girls

-0.04
Moderate

-0.04
Fast

Assessed rate of progress

Higher progress in Bangladesh Primary school enrollment in Bangladesh increased highly because of free distribution of books, food for education /stipend

Promote Gender Inequality

Target: Made Ratio of boys to girls in all levels of education to 1
World
Year Value

Bangladesh
Year Value

Baseline year value (girls deprived)

Goal year value (girls deprived) Current year value (girls deprived) Actual rate of progress Required rate of progress (= -1)
among girls deprived

1991
2015 2007

0.11
0 0.04 -0.045 -0.04

1992
2015 2005

0.54
0 0.46 -0.012 -0.04

Assessed rate of progress

Fast

Slow

Slow progress in Bangladesh, Disparity reduced in primary and secondary level but not much in tertiary education, It is, however, expanding because of

Ensure Safe Water Resource

Target: Reduce the proportion of population have non-access to safe water resources by half World Year Baseline year value (non-access) 1990 Value 23 Bangladesh (rural) Year 1990 Value 31

Goal year value (non-access)

Current year value (non-access)

2015
2006

11.5
13

2015
2006

15.5
25

Actual rate of progress

Required rate of progress (= -1/2) Assessed rate of progress

-0.03
-0.02 Fast

-0.012
-0.02 Moderate

Slow Progress in Urban Bangladesh

Actual progress for urban areas in Bangladesh is almost zero indicating that the availability of safe water resources are reversing in urban Bangladesh.

Ensure Safe Water Resource

Target: Reduce the proportion of population have non-access to safe water resources by half World Year Baseline year value (non-access) 1990 Value 23 Bangladesh (rural) Year 1990 Value 31

Goal year value (non-access)

Current year value (non-access)

2015
2006

11.5
13

2015
2006

15.5
25

Actual rate of progress

Required rate of progress (= -1/2) Assessed rate of progress

-0.03
-0.02 Fast

-0.012
-0.02 Moderate

Slow Progress in Urban Bangladesh

Actual progress for urban areas in Bangladesh is almost zero indicating that the availability of safe water resources are reversing in urban Bangladesh.

MICROCREDIT PROGRAM

Feature of Microcredit
No collateral is required to get loan Group based approach Small amount loan (100-150 US$) Weekly attendance in the group meeting Intensive credit monitoring Participatory approach

Eligibility There is no Hard and Fast Rule For Selecting Target Group: Land ownership of the household:
For example, landless and marginal farmers owning or cultivating less than 1.50 acre (0.6ha) of land on share-cropping including homestead can become members of ADIP credit program.

Age of the individuals : For example, in case of BRAC, individuals

applying for credit must be aged between 18-54 years.

Income of the households: For example, household having a

maximum monthly income of up to 3000 taka (equivalent to 44.44 USD) can become members of marginal and landless group of ADIP.

Residence of the individuals: The individual should be a permanent

resident of the village.

Eligibility

(cont)

Marital Status of the individuals. For example, married people

were encouraged in ADIP rather than singles.

Affiliation: The individual cannot be affiliated with other NGOs or any

other microcredit program at the same time.

Health status of the individuals: Individuals must be physically

active having no serious diseases like cancer or disabled.

Focus on poor and destitute women. For instance, BRAC gives

priority on widowed or divorced women with children.

Types of Loan
A. Agricultural Loan: Crop production Poultry Livestock Fisheries Small-scale agribusiness Nursery raising Social forestry

Types of Loan (cont) B . Non -Agricultural Loan: Rickshaw-Pulling Small-scale non- agricultural trade Handy-crafts

More Focus on Agricultural Activities

Who Provides?

NGOs : Local and Foreign e.g BRAC

Governmental Organization: Commercial Bank ( Sonali Bank), PKSF Donor Agencies: IFAD, FAO, USAID, CIDA etc

Role of Microcredit Program Increases household income, saving and consumption

Increases nutritional status of the poor family Creates more job opportunity for rural people Increases social , legal and political awareness Reduces gender disparity Increases agricultural production Increases health care facility Reduces environmental pollution Increases education facility for poor

Weaknesses
Credit discipline failed to be established among members due to flexibility and simplicity of NGOs rules and regulations Lack of standard techniques of saving mobilization, Training was limited in saving and loans Transparency was often questionable, No regulatory supervision was received by the program providers from the government such as auditing of account, and Existence of subsidies might have negative impact.

 Lack of information regarding creditCredit program Problems of Access To Formal Inflexible repayment schedule and complex procedure Collateral requirement by the formal credit institutions not fulfilled by the poor Gender stereotype beliefs about womens ability to effectively utilize only small loans Resistances and interferences from male relatives Inappropriate bank credit for the needs of microentrepreneurs

What Needs to Do To Improve ? Loan amount should be extended as per the IGA (s) Create more diversified employment opportunities Ensure rural infrastructural facilities such as market Enhance non-formal education facilities for borrowers Provide effective and adequate training facilities Awareness building about taking non-institutional loans Provide more input support from the government

To Get Credit Is A Human Right